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Australia's 'dirtiest' power station to close

One of Australia's dirtiest power plants will be shuttered, its owner said on Thursday, in a move hailed by environmentalists.

PHOTO: AFP

[SYDNEY] One of Australia's dirtiest power plants will be shuttered, its owner said on Thursday, in a move hailed by environmentalists.

After decades of belching pollution, the Hazelwood brown coal-fired power station in Victoria state's Latrobe Valley will close in March after French energy giant Engie decided it was no longer viable.

Some 500 people are set to lose their jobs when the plant shuts down, with another 250 remaining until 2023 to manage the decommissioning of the power station and rehabilitation of the adjoining mine site.

Engie said it was also looking to sell the brown coal-fired Loy Yang B power station in the Latrobe Valley and the gas-fired Kwinana plant in Western Australia which supplies steam and electrical power.

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"Hazelwood is now more than 50 years old. It has been a wonderful contributor to the National Electricity Market but we have now reached the point where it is no longer economic to operate," Engie's Australia chief executive Alex Keisser said in a statement.

"Engie in Australia would need to invest many hundreds of millions of dollars to ensure viable and, most importantly, continued safe operation. Given current and forecast market conditions, that level of investment cannot be justified."

Hazelwood - which supplies around 22 per cent of Victoria's energy requirements and about four per cent of the nation's - is 72 per cent owned by Engie and 28 per cent by Japanese trading house Mitsui.

Paris said late last year that Engie - partly owned by the French government - was going to stop investing in the development of coal-fired power plants, the biggest source of man-made CO2 emissions.

Brown coal is considered "dirtier" than black coal, with environmentalists welcoming the closure.

"Hazelwood is the dirtiest power station in Australia and one of the dirtiest in the world," Australian Conservation Foundation's chief executive Kelly O'Shanassy said.

"This is a key moment in a transition that is already well under way - the switch from dirty energy to clean energy - and Australia's energy policy is now at a fork in the road." The federal government unveiled a A$43 million (S$45.6 million) support package for the workers, alongside A$22 million from the state government.

Federal Energy Minister Josh Frydenberg said he would closely monitor the impact of the closure on energy supply across the nation.

It followed question marks over energy security after the entire state of South Australia was left without power in September following a severe storm.

The Hazelwood closure follows the shuttering of several other coal-fired power stations across the country in recent years.

Some 63 per cent of electricity generation in Australia is from coal, according to government data for 2014-15.